RealNetworks gives Rhapsody a makeover

RealNetworks updates its Rhapsody subscription service. Similar to Napster-To- …

Since acquiring Rhapsody just over two years ago, RealNetworks has more or less left the subscription service alone. Today, the streaming media/music company made some major changes to the service. Drawing on Microsoft's Janus copy protection technology, Rhapsody will now allow users to download tracks to supported portable digital music players, much like Napster-To-Go. Previously, Rhapsody subscribers had to be connected to the 'Net in order to even listen to tracks.

Rhapsody subscribers will now have three options: a free service that will offer anyone using Rhapsody Jukebox access to 25 songs per month, an unlimited streaming-only model for US$9.99 per month, and a US$14.99 per month level that includes the ability to save an unlimited number of tunes to your hard drive and digital music player. Of course, you can only listen to the songs for as long as you are a paying subscriber — it's a music rental service just like Napster-To-Go. Subscribers will also be able to share playlists via e-mail and "Playlist Central," a board available to all subscribers. In addition, parents can control their children's' access to some tracks based on parental ratings.

What's particularly interesting is that RealNetworks has adopted Microsoft DRM for their solution. The company has previously tried to avoid casting its lot with one company or another, calling on Apple to open up its FairPlay DRM last year. When Apple said "no thanks," Real went ahead and created Harmony, which mimicked FairPlay's DRM and allowed tracks from the RealRhapsody music service to be played on iPods. Although Apple tried to shut the door on Harmony in late 2004, RealNetworks still shows the iPod as a supported device.

Subscription-based music services appear to be growing more popular. At the very least, there are now more of them. Whether they will translate into a successful business model on a scale large enough to compete with the 800-pound gorilla of the online music scene remains to be seen. Some analysts believe subscription services will eventually become more popular than sales of individual tracks and albums, as a subscription model apparently makes the DRM easier for some to swallow. Indeed, Napster says it has added 143,000 subscribers since launching Napster-To-Go (and has raised its earnings guidance for the current quarter). Whether or not subscriptions eventually outstrip sales depends on whether people want to rent or own their music.